A New York Federal District Court recently held that an attack by two dogs upon two pedestrians constituted a single occurrence under the dog owners’ homeowners policy. In so holding, the court rejected use of the “unfortunate events” test to determine the number of occurrences because the policy language required that all injuries arising from the same general conditions would be considered to be the result of one occurrence, regardless of the number of claimants. As a result, the insurer’s liability was limited to the policy’s $300,000 per occurrence limit, rather than two or three separate per occurrence limits of $300,000 each.
The facts of the case were as follows. The injured pedestrians were walking side-by-side when the two dogs attacked. One dog jumped towards the face of the first pedestrian while the second dog attacked the other pedestrian. When the pedestrians ran away to escape the attack, one of the dogs attacked the first pedestrian again
The policyholder argued that, under these facts, the attacks should be considered three separate occurrences. The court disagreed and held that the attack by the dogs constituted “continuous or repeated exposure to substantially the same general harmful conditions” and thus qualified as only one occurrence. In coming to this decision, the court observed that New York courts generally apply the “unfortunate event test” to determine the number of occurrences and do not look to the number of persons injured nor to the sole proximate cause. The court further observed however, that the “unfortunate event” test will not be applied when an insurance policy evidences an intent to aggregate separate incidents into a single occurrence.
The policy defined an occurrence as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions, during the policy period, in: a. ‘Bodily injury’; or b. ‘Property damage” and that the policy also described the limit of liability per occurrence as:
Our total liability under Coverage E for all damages resulting from any one “occurrence” will not be more than the limit of liability for Coverage E as shown in the Declarations. This limit is the same regardless of the number of “insureds,” claims made or persons injured. All “bodily injury” and “property damage” resulting from any one accident or from continuous or repeated exposure to substantially the same general harmful conditions shall be considered to be the result of one occurrence.
The court determined that this language clearly evidenced an intent to aggregate the incidents into a single occurrence and therefore it would be inappropriate to use the “unfortunate event” test. Accordingly, the court held that while the injured pedestrians were not exposed to exactly the same conditions because there were two dogs, they were exposed to the same general conditions emanating from the same location at substantially the same time. Therefore, the attack should be treated as once occurrence.
The number of occurrences issue is important because it affects the extent of an insurer’s indemnity obligation. A finding of multiple occurrences can lead to more exposure to an insurer. The court’s decision here illustrates the importance of the using clear policy language to limit the circumstances in which multiple occurrences may be found.
Verlus v. Liberty Mutual Ins. Co., 2015 U.S. Dist. LEXIS 153908 (S.D.N.Y. Nov. 12, 2015)